Moody's Investors Service said it has downgraded to Baa1 from A1 the city of Granite Falls, Minn.'s long-term underlying general obligation rating, affecting $6.8 million of rated GO debt outstanding.
The city's outstanding debt is secured by its general obligation unlimited tax pledge, which benefits from a dedicated property tax levy that is unlimited as to rate or amount.
The downgrade reflects a number of outstanding risks facing the city including: substantial municipal hospital and nursing home operations; very high debt burden with debt service comprising a significant share of operating expenditures; very high tax payer concentration; small and declining tax base; and below average socioeconomic indices.
The rating also incorporates a conservative management team and stable financial operations with healthy reserves.